By Deepa Venkatraghvan NEW YORK ( MainStreet)--Your credit card is just like the Tree of Knowledge from the Garden of Eden. You can see the unsparing credit line extended to you but really, you cannot use it all. Well, let me put it this way: you can use all of your credit, but if you do, your credit score will take a massive hit. Deceptive, isn't it? If you've been extended a $1,000 credit line, you would assume that you're fine if you stayed within that limit and paid in full each time. The reality is quite different, because there's something called debt-to-credit limit ratio.
If you're in the same boat, don't lose heart. Here are a few tips that can help. First, pay off balances before your statement is generated. "If you want to truly control that percentage and keep it low then you'll need to either limit your use of the card or pay off the balance online before your statement is generated," Ulzheimer advised. "You know when your statement closing date is. And, because you know that date you can pay your bill online before the statement closing date, ensuring the credit bureaus receive a statement showing a $0 balance, or a lower balance depending on how much you paid toward your balance." "Another way to give yourself a little insurance is to keep one or two cards open and rarely used. The unused credit limit will help keep your debt to limit percentage lower," he added.